Head of Commodity Strategy
Summary: Hedge funds increased bullish commodity bets for a second week with precious metals and grains being the main contributors while crude oil and industrial metals were sold.
Saxo Bank publishes two weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities, bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial.
To download your copy of the Commitment of Traders: Commodities report for the week ending December 11, click here.
In crude oil, the relentless selling extending into an 11th week, albeit at a reduced pace. The combined net-long in Brent (+3.1k lots) and WTI (-8.6k lots) dropped to 256k lots, a three-year low. This occurred despite the Opec+ agreement to cut production over the coming months by 1.2 million barrels/day. The combined net-long – as per the chart below – is now more than 20% below the previous two lows in August 2016 and June 2017 from where crude oil rallied strongly on both occasions.
In soft commodities funds added fresh Arabica coffee shorts as the bean suffered a sixth straight weekly decline, its longest losing streak since July. Signs of ample supply from Brazil and a weaker BRL supporting an elevated contango, which short-sellers attempts to benefit from.
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Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Uncover the shifting focus in 2024's FX markets towards growth resilience and relativity, away from bond yields and inflation stories.
Embrace the metal revolution on the commodity market in the coming year, with a focus on gold, silver, platinum, copper, and aluminum.
The gloominess of geopolitical conflicts and the repetitive nature of political agendas. What else does 2024 hold in store for us?
The disheartening cycle of unresolved geopolitical conflicts, the rise of polarizing political parties, and the stagnation of productivity.
Understand China's political landscape in Q4 2023 and the impact on counter-cyclical initiatives, with a focus on the pivotal Q1 2024.
